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Updated May 22, 2020

The U.S. has snatched the top spot away from China as the world’s most attractive country for renewables investment for the first time since 2016, said consultancy EY in a new report.

According to EY’s Renewable Energy Country Attractiveness Index (RECAI) report, the major driver behind the growth is the government’s short-term extension of a production tax credit (PTC) for wind projects and plans to invest US$57 billion to install up to 30 GW of offshore wind by 2030.

China dropped from top position to second place now, because the government mulls over a cut in renewables subsidies and demand has slowed due to COVID-19. However, EY is still optimistic about China’s long-term growth in renewables.

While the U.S. was ranked the most favorable country in terms of renewables investment, the Trump administration ended a two-year rent holiday for solar and wind projects that operate on federal lands.

Several U.S. renewable power plants owners have confirmed they had received retroactive rent bills from the federal government. According to the U.S. Department of the Interior, a bill of US$50 million rent fees is expected for wind and solar projects in 2020, up from $1.1 million in 2019 and $21.6 million in 2018.

The move came as a shock to the industry that is already struggling with the fallout of COVID-19. In early April, the U.S. clean energy sector saw 447,208 new unemployment filings, a drastic increase from March when 147,139 claims were made. And the combined figure of the two months amount to 17.8% of the sector’s workforce.

Despite headwinds from COVID-19 and policy changes, EY predicts that the renewable sector will bounce back quickly, as the long-term drivers for investment remain strong and the transition to a sustainable energy future remains a major focus.

Noticeably, EY’s RECAI was recalibrated in April, with all underlying datasets having been refreshed and covering COVID-19 correction parameter to timely reflect the impact of the pandemic. The new COVID-19 correction parameter is centered on three criteria, including the strength of the market’s healthcare system, the size of the population at risk based on demographics, and economic vulnerability. That is, how a country handles crisis is crucial to the investment attractiveness this time.

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Renewable Energy Country Attractiveness Index (RECAI)
U.S. overtakes China as most attractive country for renewables investment: research
Trump admin slaps solar, wind operators with retroactive rent bills